They say the biggest problem is the size of government and the budget deficit.

In fact our biggest problem is the decline of the middle class and increasing ranks of the poor, while almost all the economic gains go to the top.

The Labor Department reported Tuesday that only 148,000 jobs were created in September — way down from the average of 207,000 new jobs a month in the first quarter of the year.

Many Americans have stopped looking for work. The official unemployment rate of 7.2 percent reflects only those who are still looking. If the same percentage of Americans were in the workforce today as when Barack Obama took office, today’s unemployment rate would be 10.8 percent.

Meanwhile, 95 percent of the economic gains since the recovery began in 2009 have gone to the top 1 percent. The real median household income continues to drop, and the number of Americans in poverty continues to rise.

So what’s Washington doing about this? Nothing. Instead, it’s back to debating how to cut the federal budget deficit.

The deficit shouldn’t even be an issue because it’s now almost down to the same share of the economy as it’s averaged over the last thirty years.

The triumph of right-wing Republicanism extends further. Failure to reach a budget agreement will restart the so-called “sequester” — automatic, across-the-board spending cuts that were passed in 2011 as a result of Congress’s last failure to agree on a budget.

These automatic cuts get tighter and tighter, year by year — squeezing almost everything the federal government does except for Social Security and Medicare. While about half the cuts come out of the defense budget, much of the rest come out of programs designed to help Americans in need: extended unemployment benefits; supplemental nutrition for women, infants and children; educational funding for schools in poor communities; Head Start; special education for students with learning disabilities; child-care subsidies for working families; heating assistance for poor families. The list goes on.

The biggest debate in Washington over the next few months will be whether to whack the federal budget deficit by cutting future entitlement spending and closing some tax loopholes, or go back to the sequester. Some choice.

The real triumph of the right has come in shaping the national conversation around the size of government and the budget deficit – thereby diverting attention from what’s really going on: the increasing concentration of the nation’s income and wealth at the very top, while most Americans fall further and further behind.

Continuing cuts in the budget deficit – through the sequester or a deficit agreement — will only worsen this by reducing total demand for goods and services and by eliminating programs that hard-pressed Americans depend on.

The President and Democrats should re-frame the national conversation around widening inequality. They could start by demanding an increase in the minimum wage and a larger Earned Income Tax Credit. (The President doesn’t’ even have to wait for Congress to act. He can raise the minimum wage for government contractors through an executive order.)

Framing the central issue around jobs and inequality would make clear why it’s necessary to raise taxes on the wealthy and close tax loopholes (such as “carried interest,” which enables hedge-fund and private-equity managers to treat their taxable income as capital gains).

It would explain why we need to invest more in education – including early-childhood as well as affordable higher education.

This framework would even make the Affordable Care Act more understandable – as a means for helping working families whose jobs are paying less or disappearing altogether, and therefore in constant danger of losing health insurance.

The central issue of our time is the reality of widening inequality of income and wealth. Everything else — the government shutdown, the fight over the debt ceiling, the continuing negotiations over the budget deficit — is a dangerous distraction. The Right’s success in generating this distraction is its greatest, and most insidious, triumph.

August 04, 2013

Job-growth is sputtering. So why, exactly, do regressive Republicans continue to say “no" to every idea for boosting it — even last week’s almost absurdly modest proposal by President Obama to combine corporate tax cuts with increased spending on roads and other public works?

It can’t be because Republicans don’t know what’s happening. The data are indisputable. July’s job growth of 162,000 jobs was the weakest in four months. The average workweek was the shortest in six months. The Bureau of Labor Statistics has also lowered its estimates of hiring during May and June.

It can’t be Republicans really believe further spending cuts will help. They’ve seen the effects of austerity economics on Europe. They know the study they relied on by Carmen Reinhart and Kenneth Rogoff has been debunked. They’re no longer even trying to make the case for austerity.

It could be they just want to continue opposing anything Obama proposes, but that’s beginning to seem like a stretch. Republican leaders and aspiring 2016 presidential candidates are warning against being the “party of ‘no.’" Public support for the GOP continues to plummet.

The real answer, I think, is they and their patrons want unemployment to remain high and job-growth to sputter. Why? Three reasons:

First, high unemployment keeps wages down. Workers who are worried about losing their jobs settle for whatever they can get — which is why hourly earnings keep dropping. The median wage is now 4 percent lower than it was at the start of the recovery. Low wages help boost corporate profits, thereby keeping the regressives’ corporate sponsors happy.

Third, high unemployment keeps most Americans economically fearful and financially insecure. This sets them up to believe regressive lies — that their biggest worry should be that “big government" will tax away the little they have and give it to “undeserving" minorities; that they should support low taxes on corporations and wealthy “job creators;" and that new immigrants threaten their jobs.

It’s important for Obama and the Democrats to recognize this cynical strategy for what it is, and help the rest of America to see it.

And to counter with three basic truths:

First, the real job creators are consumers, and if average people don’t have jobs or good wages this economy can’t have a vigorous recovery.

Second, the rich would do better with a smaller share of a rapidly-growing economy than their current big share of an economy that’s hardly moving.

Third, therefore everyone would benefit from higher taxes on the wealthy to finance public investments in roads, bridges, public transit, better schools, affordable higher education, and healthcare — all of which will help the middle class and the poor, and generate more and better jobs.

March 02, 2013

Imagine a plot to undermine the government of the United States, to destroy much of its capacity to do the public’s business, and to sow distrust among the population.

Imagine further that the plotters infiltrate Congress and state governments, reshape their districts to give them disproportionate influence in Washington, and use the media to spread big lies about the government.

Finally, imagine they not only paralyze the government but are on the verge of dismantling pieces of it.

Far-fetched? Perhaps. But take a look at what’s been happening in Washington and many state capitals since Tea Party fanatics gained effective control of the Republican Party, and you’d be forgiven if you see parallels.

Tea Party Republicans are crowing about the “sequestration” cuts beginning today (Friday). “This will be the first significant tea party victory in that we got what we set out to do in changing Washington,” says Rep. Tim Huelskamp (Kan.), a Tea Partier who was first elected in 2010.

Sequestration is only the start. What they set out to do was not simply change Washington but eviscerate the U.S. government — “drown it in the bathtub,” in the words of their guru Grover Norquist – slashing Social Security and Medicare, ending worker protections we’ve had since the 1930s, eroding civil rights and voting rights, terminating programs that have helped the poor for generations, and making it impossible for the government to invest in our future.

Sequestration grew out of a strategy hatched soon after they took over the House in 2011, to achieve their goals by holding hostage the full faith and credit of the United States – notwithstanding the Constitution’s instruction that the public debt of the United States “not be questioned.”

To avoid default on the public debt, the White House and House Republicans agreed to harsh and arbitrary “sequestered” spending cuts if they couldn’t come up with a more reasonable deal in the interim. But the Tea Partiers had no intention of agreeing to anything more reasonable. They knew the only way to dismember the federal government was through large spending cuts without tax increases.

Nor do they seem to mind the higher unemployment their strategy will almost certainly bring about. Sequestration combined with January’s fiscal cliff deal is expected to slow economic growth by 1.5 percentage points this year – dangerous for an economy now crawling at about 2 percent. It will be even worse if the Tea Partiers refuse to extend the government’s spending authority, which expires March 27.

A conspiracy theorist might think they welcome more joblessness because they want Americans to be even more fearful and angry. Tea Partiers use fear and anger in their war against the government – blaming the anemic recovery on government deficits and the government’s size, and selling a poisonous snake-oil of austerity economics and trickle-down economics as the remedy.

They likewise use the disruption and paralysis they’ve sown in Washington to persuade Americans government is necessarily dysfunctional, and politics inherently bad. Their continuing showdowns and standoffs are, in this sense, part of the plot.

What is the President’s response? He still wants a so-called “grand bargain” of “balanced” spending cuts (including cuts in the projected growth of Social Security and Medicare) combined with tax increases on the wealthy. So far, though, he has agreed to a gross imbalance — $1.5 trillion in cuts to Republicans’ $600 billion in tax increases on the rich.

The President apparently believes Republicans are serious about deficit reduction, when in fact the Tea Partiers now running the GOP are serious only about dismembering the government.

And he seems to accept that the budget deficit is the largest economic problem facing the nation, when in reality the largest problem is continuing high unemployment (some 20 million Americans unemployed or under-employed), declining real wages, and widening inequality. Deficit reduction now or in the near-term will only make these worse.

Besides, the deficit is now down to about 5 percent of GDP – where it was when Bill Clinton took office. It is projected to mushroom in later years mainly because healthcare costs are expected to rise faster than the economy is expected to grow, and the American population is aging. These trends have little or nothing to do with government programs. In fact, Medicare is far more efficient than private health insurance.

I suggest the President forget about a “grand bargain.” In fact, he should stop talking about the budget deficit and start talking about jobs and wages, and widening inequality – as he did in the campaign. And he should give up all hope of making a deal with the Tea Partiers who now run the Republican Party.

Instead, the President should let the public see the Tea Partiers for who they are — a small, radical minority intent on dismantling the government of the United States. As long as they are allowed to dictate the terms of public debate they will continue to hold the rest of us hostage to their extremism.

October 14, 2012

There is no shortage of reasons not to vote Republican. The litany includes tax cuts for the rich, cutbacks in government programs, obstructing needed legislation, disregard for the environment, denial of women's and other human rights, military escalation.

But the following five reasons have to do with money -- specifically, who's paying for the $1 trillion of annual tax savings and tax avoidance for the super-rich? And who's paying for the $1 trillion of national security to protect their growing fortunes? The Republicans want that money to come from the rest of us.

Paul Ryan's proposed budget would take about a half-trillion dollars a year from programs that support the poor. This is a continuation of a 15-year shredding of the safety net by Republicans. The GOP-controlled Congress of Bill Clinton created Temporary Assistance to Needy Families (TANF), which has experienced a 60% drop in its caseload despite growing poverty, and which, according to the Urban Institute, provides "maximum benefits [that] even in the more generous states were far below the federal poverty level of $1,525 a month for a family of three."

The Supplemental Nutrition Assistance Program (SNAP), another vital program that serves 50 million "food insecure" Americans, would be cut by $16 billion under the House version of the Farm Bill. The average recipient currently gets $4.30 a day for food.

Encouraged by the steady Republican demand for lower corporate tax rates, big business has effected a stunning shift in taxpaying responsibility over the years, from corporate income tax to worker payroll tax. For every dollar of payroll tax paid in the 1950s, corporations paid three dollars. Now it's 22 cents.

It's gotten worse in recent years, as corporations decided to drastically cut their tax rates after the start of the recession. After paying an average of 22.5% from 1987 to 2008, they've paid an annual rate of 10% since. This represents a sudden $250 billion annual loss in taxes.

Republicans claim that almost half of Americans don't pay taxes. But when payroll and state and local taxes are considered, middle-income Americans pay at about the same rate as the highest earners. Only about 17% of households paid no federal income tax or payroll tax in 2009. And average workers get little help from people who make most of the money. Because of the $110,000 cutoff for payroll tax deductions, the richest 10% of Americans save $150 billion a year in taxes.

3. Job Shrinkage -- Republicans want Young People to Pay

The jobs that exist for young Americans are paying much less than just a few years ago. During and after the recession, according to the National Employment Law Project, low-wage jobs ($7.69 to $13.83 per hour) dropped by 21 percent, and then grew back at a 58 percent rate. Mid-wage jobs ($13.84 to $21.13 per hour) dropped by 60 percent and grew back at a 22 percent rate. In other words, the median wage is falling fast.

Yet Republicans killed a jobs bill that was supported by two-thirds of the public.

An academic study of employment data over 64 years found that an average of two million jobs per year were created under Democratic presidents, compared to one million under Republican presidents. Similar results were reported by the Bloomberg Government Barometer.

4. Retirement Planning -- Republicans want the Seniors to Pay

There's a common misconception in our country that most seniors are financially secure. Actually, Census data reveals that elderly people experience greater inequality than any other population group, with the poorest one-fifth receiving just 5.5% of the group's total resources, while the wealthiest one-fifth receives 46%.

The senior wealth gap is further evidenced by data during the great 30-year surge in inequality. The average over-60 wealth was five times greater than the median in 1995, as would be expected with a small percentage of ultra-high-net-worth individuals and a great majority of low-wealth people. Further confirmation comes from 2004 Harvard data that shows rising inequality within all age groups, including the elderly. Indeed, an MIT study found that about 46% of U.S. senior citizens have less than $10,000 in financial assets when they die.

For the vast majority of seniors, Social Security has been life-sustaining, accounting for 55% of their annual income. Because of this successful and popular program, the senior poverty rate has dropped from 50% to 10%, and due to life-long contributions from working Americans the program has a $2.7 trillion surplus while contributing nothing to the deficit. Yet Republicans want to undo it.

5. Public Fire Sale -- Republicans want Society to Pay

The common good is threatened by the Republican disdain for public resources. Drilling and mining and pipeline construction continues on public lands, and the House of Representatives has voted over 100 times since 2011 to subsidize the oil and gas industry while weakening environmental, public health, and safety requirements. The "land grab" is pitting corporate muscle against citizens' rights.

Sadly, most of America envisions a new era of energy independence that increases our world-leading consumption of energy while depending on a proliferation of dirty technologies to extract it. Threats of methane emissions, water pollution, and earthquake activity don't deter the fossil fuel enthusiasts.

It gets worse. Republicans are eager to sell public land. Paul Ryan's "Path to Prosperity" proposes to sell millions of acres of "unneeded federal land" and billions of dollars worth of federal assets. His running mate Mitt Romney admits that he doesn't know "what the purpose is" of public lands.

That brings us to the heart of the reasons not to vote Republican. Their reckless belief in the free market, and their dependency on corporatization and privatization to run the country, means that middle-class Americans keep paying for the fabulously wealthy people at the top who think they deserve everything they've taken from society.

Paul Buchheit is a college teacher, an active member of US Uncut Chicago, founder and developer of social justice and educational websites (UsAgainstGreed.org, PayUpNow.org, RappingHistory.org), and the editor and main author of "American Wars: Illusions and Realities" (Clarity Press). He can be reached at paul@UsAgainstGreed.org.

July 21, 2012

It is sad and, frankly, frightening when Americans explain away the harshness and lack of compassion in their country by vilifying individuals who manage to survive in difficult circumstances. A lack of class consciousness, racism, puritanism, and pure delusion about America’s purported superiority result in nonsense being passed off as social science and matters which should be political being made personal.

A recent New York Times article examined the lives of two Michigan mothers, one the married mother of two and one the unmarried mother of three. The unmarried mother struggles on an annual salary of $25,000 without health care benefits. She survives with the assistance of food stamps and the earned income tax credit.

The article, “ Two Classes, Divided by ‘I Do,’” makes a big deal not about the single woman’s status as an hourly wage worker, or her lack of health benefits. Her marital status is made the central issue when in fact it is of secondary importance.

The reporter goes to great pains to repeat that college educated married couples have higher incomes, better health and fewer divorces. Unmarried parents are at higher risk of everything bad, and the New York Times and its experts conclude that marriage alone is the key to the good life.

No mention is made of the fact that in more advanced, truly civilized countries, single mothers can live quite well. It doesn’t matter if they have children with more than one man, or dare to keep dating, which according to the New York Times is inherently a harbinger of bad tidings.

The fact is that a single mother gets the short end of the stick in America because she lives in America. She lives in a country where women’s pay still lags behind that of men and because there is no safety net to speak of. The unmarried woman in the article took less than the recommended time to recuperate from surgery because she needed the money. If she lived in Sweden or some other frightful den of European socialism, she would have had no such problems.

She would have national health insurance, the dreaded “socialized medicine” used to scare uninformed Americans. She would have been paid for her maternity leave for up to two years. Despite being single she would have a similar standard of living as the married counterpart she was compared to.

What the Times failed to mention is that married couples who are working class can be as badly off as the single mother profiled in the article. If employed at all, they may work long hours for low pay. Their difficult circumstances will make it more likely that they will not stay married for long, and their children will suffer from a variety of ills because their parents lack financial resources.

It is sad that in the 21st century the American media has nothing to offer except platitudes about the plight of single mothers who made bad decisions about men. The paper of record doesn’t even point out that divorce has brought many a well off married mother down to the level of working class misery.

If the harshness and lack of compassion in American society were examined, there would be a very different story indeed. Far from being the generous land lionized by apologists, we would be told that our personal decisions can condemn us to lifelong suffering in a country where individuals are at the mercy of a culture of survival of the fittest.

If the single mother in the Times article had only one child instead of three, or no children at all, she would not be much better off. An hourly worker who earns only $25,000 annually is going to have a very difficult life financially. Instead of needlessly glamorizing married people, and making one segment of society seem superior to another, we should have a much needed examination of what kind of country we ought to have.

America needs a true democracy, a nation in which everyone’s material needs are met. Those needs would be met with a fair system of progressive taxation. There would be little money spent on the military and a great deal spent on public education. No one would have to pay for health care, and wealthy people would not have more political power than anyone else. Jails and prisons would have small numbers of incarcerated persons instead of more than any other country on the planet. Race and gender would not prevent anyone from ascending to whatever position he or she chose. Unemployment would be low, and wages for working class people would be high.

Instead we live in a country which is the exact opposite of the one we should live in. That is our biggest problem, not single women having children. Democracy and social justice will fix a variety of ills, not puritanical hand wringing reminiscent of the 1950s.

April 14, 2012

One general rule of modern politics is that the people who talk most about future generations — who go around solemnly declaring that we’re burdening our children with debt — are, in practice, the people most eager to sacrifice our future for short-term political gain. You can see that principle at work in the House Republican budget, which starts with dire warnings about the evils of deficits, then calls for tax cuts that would make the deficit even bigger, offset only by the claim to have a secret plan to make up for the revenue losses somehow or other.

New Jersey Gov. Chris Christie. "The governor," writes Krugman, "poses as a man willing to make hard choices for the future, but what he actually did was sacrifice the future for the sake of personal political advantage."(John O'Boyle/The Star-Ledger)

And you can see it in the actions of Chris Christie, the governor of New Jersey, who talks loudly about acting responsibly but may actually be the least responsible governor the state has ever had.

Mr. Christie’s big move — the one that will define his record — was his unilateral decision back in 2010 to cancel work that was already under way on a new rail tunnel linking New Jersey with New York. At the time, Mr. Christie claimed that he was just being fiscally responsible, while critics said that he had canceled the project just so he could raid it for funds.

Now the independent Government Accountability Office has weighed in with a report on the controversy, and it confirms everything the critics were saying.

Much press coverage of the new report focuses, understandably, on the evidence that Mr. Christie made false statements about the tunnel’s financing and cost. The governor asserted that the projected costs were rising sharply; the report tells us that this simply wasn’t true. The governor claimed that New Jersey was being asked to pay for 70 percent of a project that would shower benefits on residents of New York; in fact, the bulk of the financing would have come either from the federal government or from the Port Authority of New York and New Jersey, which collects revenue from residents of both states.

But while it’s important to document Mr. Christie’s mendacity, it’s even more important to understand the utter folly of his decision. The new report drives home just how necessary, and very much overdue, the tunnel project was and is. Demand for public transit is rising across America, reflecting both population growth and shifting preferences in an era of high gas prices. Yet New Jersey is linked to New York by just two single-track tunnels built a century ago — tunnels that run at 100 percent of capacity during peak hours. How could this situation not call for new investment?

Well, Mr. Christie insisted that his state couldn’t afford the cost. As we’ve already seen, however, he apparently couldn’t make that case without being dishonest about the numbers. So what was his real motive?

One answer is that the governor is widely assumed to have national ambitions, and the Republican base hates government spending in general (unless it’s on weapons). And it hates public transportation in particular. Indeed, three other Republican governors — in Florida, Ohio and Wisconsin — have also canceled public transportation projects supported by federal funds. The difference, of course, is that New Jersey is a densely populated state, most of whose residents live either in Greater New York or Greater Philadelphia; given that position, public transit is the state’s lifeblood, and refusing to invest in such transportation will strangle the state’s economy.

Another answer is that canceling the tunnel allowed Mr. Christie to divert funds from that project — as his critics have said, to cannibalize the investment — and put them into the state highway fund, thereby avoiding the need to raise the state’s tax on gasoline. New Jersey gas taxes, by the way, are lower in real terms than at any point in the state’s history. But, as a candidate, Mr. Christie said that he wouldn’t raise those taxes, so cannibalizing the tunnel helped him avoid embarrassment.

The crucial point about both of these explanations is that they stand Mr. Christie’s narrative about himself on its head. The governor poses as a man willing to make hard choices for the future, but what he actually did was sacrifice the future for the sake of personal political advantage. He catered to national Republican prejudices that are completely at odds with New Jersey’s needs; he cared more about avoiding embarrassment over a misguided campaign pledge than about serving an urgent public need.

Unfortunately, Mr. Christie’s behavior is all too typical these days.

America used to be a country that thought big about the future. Major public projects, from the Erie Canal to the interstate highway system, used to be a well-understood component of our national greatness. Nowadays, however, the only big projects politicians are willing to undertake — with expense no object — seem to be wars. Funny how that works.

Paul Krugman is professor of Economics and International Affairs at Princeton University and a regular columnist for The New York Times. Krugman was the 2008 recipient of the Nobel Prize in Economics. He is the author of numerous books, including The Conscience of A Liberal, and his most recent, The Return of Depression Economics.

April 03, 2012

The big bad event of last week was, of course, the Supreme Court hearing on health reform. In the course of that hearing it became clear that several of the justices, and possibly a majority, are political creatures pure and simple, willing to embrace any argument, no matter how absurd, that serves the interests of Team Republican.

But we should not allow events in the court to completely overshadow another, almost equally disturbing spectacle. For on Thursday Republicans in the House of Representatives passed what was surely the most fraudulent budget in American history.

And when I say fraudulent, I mean just that. The trouble with the budget devised by Paul Ryan, the chairman of the House Budget Committee, isn’t just its almost inconceivably cruel priorities, the way it slashes taxes for corporations and the rich while drastically cutting food and medical aid to the needy. Even aside from all that, the Ryan budget purports to reduce the deficit — but the alleged deficit reduction depends on the completely unsupported assertion that trillions of dollars in revenue can be found by closing tax loopholes.

And we’re talking about a lot of loophole-closing. As Howard Gleckman of the nonpartisan Tax Policy Center points out, to make his numbers work Mr. Ryan would, by 2022, have to close enough loopholes to yield an extra $700 billion in revenue every year. That’s a lot of money, even in an economy as big as ours. So which specific loopholes has Mr. Ryan, who issued a 98-page manifesto on behalf of his budget, said he would close?

None. Not one. He has, however, categorically ruled out any move to close the major loophole that benefits the rich, namely the ultra-low tax rates on income from capital. (That’s the loophole that lets Mitt Romney pay only 14 percent of his income in taxes, a lower tax rate than that faced by many middle-class families.)

So what are we to make of this proposal? Mr. Gleckman calls it a “mystery meat budget,” but he’s being unfair to mystery meat. The truth is that the filler modern food manufacturers add to their products may be disgusting — think pink slime — but it nonetheless has nutritional value. Mr. Ryan’s empty promises don’t. You should think of those promises, instead, as a kind of throwback to the 19th century, when unregulated corporations bulked out their bread with plaster of paris and flavored their beer with sulfuric acid.

Come to think of it, that’s precisely the policy era Mr. Ryan and his colleagues are trying to bring back.

So the Ryan budget is a fraud; Mr. Ryan talks loudly about the evils of debt and deficits, but his plan would actually make the deficit bigger even as it inflicted huge pain in the name of deficit reduction. But is his budget really the most fraudulent in American history? Yes, it is.

To be sure, we’ve had irresponsible and/or deceptive budgets in the past. Ronald Reagan’s budgets relied on voodoo, on the claim that cutting taxes on the rich would somehow lead to an explosion of economic growth. George W. Bush’s budget officials liked to play bait and switch, low-balling the cost of tax cuts by pretending that they were only temporary, then demanding that they be made permanent. But has any major political figure ever premised his entire fiscal platform not just on totally implausible spending projections but on claims that he has a secret plan to raise trillions of dollars in revenue, a plan that he refuses to share with the public?

What’s going on here? The answer, presumably, is that this is what happens when extremists gain complete control of a party’s discourse: all the rules get thrown out the window. Indeed, the hard right’s grip on the G.O.P. is now so strong that the party is sticking with Mr. Ryan even though it’s paying a significant political price for his assault on Medicare.

Now, the House Republican budget isn’t about to become law as long as President Obama is sitting in the White House. But it has been endorsed by Mr. Romney. And even if Mr. Obama is reelected, the fraudulence of this budget has important implications for future political negotiations.

Bear in mind that the Obama administration spent much of 2011 trying to negotiate a so-called Grand Bargain with Republicans, a bipartisan plan for deficit reduction over the long term. Those negotiations ended up breaking down, and a minor journalistic industry has emerged as reporters try to figure out how the breakdown occurred and who was responsible.

But what we learn from the latest Republican budget is that the whole pursuit of a Grand Bargain was a waste of time and political capital. For a lasting budget deal can only work if both parties can be counted on to be both responsible and honest — and House Republicans have just demonstrated, as clearly as anyone could wish, that they are neither.

Paul Krugman is professor of Economics and International Affairs at Princeton University and a regular columnist for The New York Times. Krugman was the 2008 recipient of the Nobel Prize in Economics. He is the author of numerous books, including The Conscience of A Liberal, and his most recent, The Return of Depression Economics.

March 24, 2012

“Promoting the natural rights and the inherent dignity of the individual must be the central focus of all government.”

House Budget Committee Chairman Rep. Paul Ryan, R-Wis., holds up a copy of his budget plan entitled "The Path to Prosperity," Tuesday, March 20, 2012, during a news conference on Capitol Hill in Washington. (Jacquelyn Martin, Associated Press)

That’s what Congressman Paul Ryan wrote earlier this month in an exclusive commentary for Spotlight on Poverty and Opportunity. This week, he revealed exactly where his laser-like focus on dignity would lead this nation. He released his budget proposal, as clear a statement of one’s principles and priorities as there is in politics.

Here are the results, and they’re not pretty. Nation readers with young children should probably ask them to leave the room before reading onward.

The congressman would also block-grant the program so it would no longer be able to respond to rising need during times like these—in 2010 alone food stamps kept 3.9 million people out of poverty. If you liked the cash assistance for poor families (TANF) block grant—which resulted in a free-fall from 68 of every 100 poor families receiving help to 27 of every 100—then you will absolutely love the Don’t Worry Ryan Will Feed You block grant.

All told, Ryan hands out about $4.4 trillion in tax cuts that primarily benefit the very best off, and pays for it with $4.15 trillion in spending cuts to programs that primarily benefit the poor and middle class.

Mr. Ryan’s focus on dignity… means the repeal of the Affordable Care Act and attacking Medicaid with his block-granting light saber. The repeal results in at least 33 million people losing their healthcare, and the Don’t Worry Ryan Will Heal You block grant shifts costs of covering poor people to the states (because their budgets are in such great shape)—cutting federal funding by approximately 20 percent over the next decade and adding “tens of millions of Americans to the ranks of the uninsured and underinsured,” according the Center on Budget and Policy Priorities (CBPP). Worth noting too is that two out of every three Medicaid dollars currently goes to care for people in nursing homes, victims of catastrophic accidents and disabled children, according to the Center for American Progress.

Mr. Ryan’s focus on dignity… means reneging on the already austere discretionary spending level just passed by Congress during the deficit ceiling debacle so that the Congressman can lower it by another $19 billion. He would further squeeze spending on programs such as WIC, Head Start, affordable housing, heating and cooling assistance, childcare assistance, education, public health. Defense, however, would receive $203 billion more than the Pentagon itself is asking for over the next decade (at the expense of cuts to programs that veterans disproportionately rely on).

“Non-defense discretionary spending is already on a path to be at the lowest level it’s been since the Eisenhower administration and the House GOP budget is talking about cutting it by an additional 25 percent,” said Melissa Boteach, director of Half in Ten, a campaign to reduce poverty by 50 percent over ten years.

Mr. Ryan’s focus on dignity… means knowing the poor and vulnerable will be hit and hit hard, but not being entirely sure how and where. Jim Horney, vice president for federal fiscal policy at CBPP, says the congressman’s $1.2 trillion in unspecified cuts to “non-health mandatory” programs amount to a “massive hidden” cut to the safety net.

“You cannot achieve those savings without making very deep cuts in the crucial safety-net programs in this category, such as…Supplemental Security Income for the elderly and disabled poor, Temporary Assistance for Needy Families (TANF), the school lunch and other child nutrition programs, and unemployment insurance,” writes Horney.

Mr. Ryan’s focus on dignity… means not only extending the Bush tax cuts for the wealthy but handing them an additional $3 trillion in tax cuts to boot. If he just extended the Bush tax cuts, but nixed the Don’t Worry Rich People, Ryan Loves You additional tax cuts—that alone would pay for the repeal of the Affordable Care Act, the Medicaid cuts, the SNAP cuts and domestic discretionary spending cuts.

All told, Ryan hands out about $4.4 trillion in tax cuts that primarily benefit the very best off, and pays for it with $4.15 trillion in spending cuts to programs that primarily benefit the poor and middle class.

“The inherent dignity of all people is the foundational principle of Catholic social teaching because we’re all created in the image of God,” Father Thomas Kelly, a constituent of Representative Ryan’s, told me after a conference call with Half in Ten. “A budget that cuts nutrition programs for poor children and tells working families they must sacrifice even more so the wealthy can have bigger tax cuts offends bedrock Catholic values. It’s hard to square Representative Ryan’s moral rhetoric with the cruel reality of this budget.”

“A budget that diminishes what we provide for the one in six Americans who are struggling with hunger is not a budget befitting a moral country,” said Rabbi Steve Gutow, president of the Jewish Council for Public Affairs. “A plan reflective of our national priorities should seek to lift up our neighbors in a time of high unemployment and poverty; instead, this demands the most from those with the least, and flies in the face of the common dignity of all Americans.”

Mr. Ryan’s focus on dignity… means that the man is in desperate need of LASIK surgery. Better hurry, before he’s forced to rely on his proposed Don’t Worry Ryan Will Give You A Voucher healthcare system for seniors.

Greg Kaufmann is a Nation contributor. His column, This Week in Poverty, posts every Friday morning. His work has also appeared on Common Dreams, AlterNet, Tikkun.org, NPR.org, CBS News.com, and MichaelMoore.com. Constructive comments and ideas will also be read at WeekInPoverty@me.com. Please follow him on Twitter as well.

March 14, 2012

When I was a graduate student at UCSD in the midst of the anti-war movement, protesting the war in Vietnam, I went to the library and pondered what would make the world a better place, what could I do to contribute something that might make war less likely and peace time activity more likely. I concluded that more cooperation was needed. More ways to resolve conflicts big and small. For example, democratic voting systems resolve conflicts in such a way that solutions are found that are acceptable to all parties for the most part. I took it for granted that institutions that provided for more cooperation and less competition were more desirable. I thought that this was what the Enlightenment was all about. My heroes were the Enlightenment superstars: Jeremy Bentham, John Stuart Mill, Rousseau, Diderot, Voltaire, John Locke.

As I sat there and went through the stacks, I discovered another field and another set of superstars. Social choice has a long history going back to the French Enlightenment philosophers, the Marquis de Condorcet and Jean-Charles de Borda, and even further back than that. One of the 19th century superstars in this field was none other than the Rev. C. L. Dodgson otherwise known as Lewis Carroll, the author of Alice in Wonderland. These guys came up with voting systems which are essential to democracy and are essential to the whole notion of cooperation and conflict resolution. The most recent work in this field was by Kenneth Arrow who published a book Social Choice and Individual Valuesin the 1950s which attempted to generalize conflict resolution in society in both the political and economic spheres. Arrow concluded that this was impossible and came up with his famous Impossibility Theorem which was a generalization using sophisticated mathematics of the paradox of voting that was known to Condorcet hundreds of years ago. Therefore, Arrow concluded democracy was impossible and any economic system other than capitalism was impossible too. Hmmm, I thought, this is obviously a cop-out because some political and economic systems are more desirable than others and Arrow has done nothing except to throw cold water on any framework that could consider these. I took it as my self-assigned task to prove that Arrow was wrong, that social choice is possible. My work can be found on the website Social Choice and Beyond.

In “Social Choice and Individual Values,” Kenneth Arrow said , “In a capitalist democracy there are essentially two methods by which social choices can be made: voting, typically used to make ‘political’ decisions, and the market mechanism, typically used to make ‘economic’ decisions.” This paper resolves that dichotomy by developing a meta-theory from which can be derived methods for both political and economic decision making. This theory overcomes Arrow’s Impossibility Theorem in which he postulates that social choice is impossible and compensates for strategic voting, an undesirable aspect of decision making according to Gibbard and Satterthwaite. Thus the politonomics meta-theory spawns both political and economic systems which are indeed possible and which cannot be gamed. In a typical voting system the outcome of an election among several candidates results in one realized outcome – the winner of the election - which applies to all voters. In a typical economic system, a consumer may choose among a variety of possible baskets of consumer items and work programs with the result that multiple realized outcomes are possible with a unique or quasi-unique outcome for each worker/consumer. As the number of possible realized outcomes of a political-economic decision making process increases, the process becomes more economic and less political in nature and vice versa. We show that as the number of possible realized outcomes increases, voter/consumer/worker satisfaction or utility increases both individually and collectively.

I never considered, as I sat there pondering, that there would be people who would argue that what the world needed was not more cooperation but more competition, but, as I sit here today, I realize that the whole conservative right wing is in favor of just that. They want not more cooperation in either the political or economic realm but more competition believing that only winners should prevail and human progress is only possible when you give free reign to those among us who are the most talented, intelligent and ambitious. They believe that competition will result in the strongest among us winning just as Nietzsche believed that a good war hallows every cause. Their ethic is that the naturally gifted elite should prevail, and they are not concerned about what happens to the rest of us or of who is trampled in the process. This is also the philosophy of Ayn Rand as espoused in her novels Atlas Shrugged and The Fountainhead.

The debate today about increasing inequality in the world has to do with the prevalent conservative belief that only the strong should survive and be promoted and that freedom should preclude equality as a value. The rich should get more tax breaks because they are the true instigators of human progress and should be catered to at every turn. Perhaps a few crumbs will trickle down to the rest of us. This kind of thinking is counter to the Enlightenment and is fast returning us to a neo-Dark Age. No more is human progress to be measured in reduction of poverty and extension of basic services like health care to everyone. It is to be measured in terms of the great advances to human civilization like iPads, iPods and iPhones. People who are capable of coming up with these advances should be cut every break and none of the billions of dollars they make should be transferred by government to the least of these among us like the homeless, the poverty-stricken and the destitute because, well, they are the least among us, not the best among us who should be given every break.

Nevertheless, I remain in the camp of those who think that more cooperation in the political and economic spheres will do more for human progress than more competititon. I also have spent about 40 years in my spare time trying to prove that Arrow was wrong, that social choice is not impossible and that democracy in both the political and economic spheres is not only possible but desirable. This has a lot to do with voting systems, democratic institutions and constitutions but also with cooperative economic systems in which freedom is seen not as the freedom to make money at other people's expense (the losers in the competitive struggle) but the freedom to work as much or as little as one chooses and in accordance with one's preferences as much as possible. Freedom from work is for many people just as desirable a goal as the freedom to make billions of dollars, and wealthy people who don't have to work would be the first to tell you that. Economic democracy in my view is more desirable than cutthroat capitalism, and can be practiced not only at the national level, but at the enterprise level in the form of co-ops like the Mondragon Corporation.

Marx's famous definition of the "good society" was "from each according to his ability, to each according to his needs." This of course was perverted in defining communism as a society where all the wealth created by those who had a lot of talent and ability as well as a strong work ethic combined with those who had not so much in those categories would be thrown into a pot and then divided up in equal portions and handed out by the government. Such need not be the case in achieving the "good society." The "needs" part is pretty basic and could probably be accomplished with abouit 10% of the wealth that exists in the world today. Most people can provide for their own needs - no transfer necessary. There are some who cannot and to transfer a small part of the wealth of the wealthy to provide for their basic needs seems to me to be no more than humane. That still leaves the vast amount of wealth in the hands of the wealthy. In other words if you total up how much it would cost to provide for all the basic needs of everyone in the world and tote up how much wealth there exists in the world, it would take a fraction of all that wealth to provide the basic needs for everyone who cannot provide for their basic needs themselves who turn out to be mainly children, seniors and handicapped (whether physically or mentally) people.

A recent documentary by German TV station Deutsche Welle pointed out that half the world's production of food is wasted because super markets only want perfect vegetables and ones with slight blemishes are thrown out even though they are perfectly edible. Shelves need to be fully stocked with bread right up till closing hours even though any bread left over at the end of day will be thrown out as "day old." All the food that is thrown out by advanced nations is enough to feed all the world's hungry three times over although no governments or other institutions, much less the supermarkets themselves, seem to be interested in organizing that effort. This is what I mean by the fact that the basic needs of all the world's people could be satisfied without subtracting much if anything from the world's wealthy although a lot of them would admit they do not need incomes of millions of dollars a day like the Fortune 400 billionaires have.

Another documentary noted that Finnish school children have the highest test scores in the world despite the fact that they have one of the world's shortest school days with 15 minutes intermissions between classes during which time they are encouraged to go outdoors and play. All grades have large amounts of music, art and self-defined projects. They don't teach to the test. They are concerned with the development of each student as an overall human being not just as some super competitive cog in a nationally competitive machine. The Chinese on the other hand have the opposite approach demanding that children learn by rote methods and extra hours in school and at study. The Finnish schools are all public and everyone is accepted into every class. There are no advanced classes or tracking of students into lesser classes if they are not among the elite intellectually. Everyone is thrown in together; yet they have the best outcomes of any country in the world on standardized international tests. Egalitariansim seems to gain the best results.

An egalitarian ethic in which the concern is for the development of the whole human being rather than a promotion of just those who have superior abilities in accordance with a competitive ethic seems to me to be the most humanitarian way to treat both children and adults. The 1948 Universal Declaration of Human Rights already provides for most of the "from each according to their abilities, to each according to their needs" ethic. It calls for free health care which most advanced socierties, with the exception of the United States, already provide. It calls for free education and other public institutions and covers most basic human needs including food and shelter.

Article 25.

(1) Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.

(2) Motherhood and childhood are entitled to special care and assistance. All children, whether born in or out of wedlock, shall enjoy the same social protection.

Article 26.

(1) Everyone has the right to education. Education shall be free, at least in the elementary and fundamental stages. Elementary education shall be compulsory. Technical and professional education shall be made generally available and higher education shall be equally accessible to all on the basis of merit.

(2) Education shall be directed to the full development of the human personality and to the strengthening of respect for human rights and fundamental freedoms. It shall promote understanding, tolerance and friendship among all nations, racial or religious groups, and shall further the activities of the United Nations for the maintenance of peace.

(3) Parents have a prior right to choose the kind of education that shall be given to their children.

All the basic needs of everyone on the planet could be provided for without subtracting much of the wealth of the rich since most people can provide for at least their basic needs without any transfer of wealth whatsover being necessary. Interestingly, the US among other nations does provide food security for the poor through its food stamps program. And of course seniors are provided for through Medicare, Medicaid and Social Security, programs which conservative free marketers are anxious to change or eliminate.

I am with the Enlightenment thinkers especially the English utilitarians like Jeremy Bentham and John Stuart Mill who thought about the happiness of society as a whole and concluded that everyone counted, not only the ones with exceptional talent, ability and other admirable qualities. A society should be judged by how it treats "the least of these my brethren" which is the core and essence of Jesus' teachings but, sad to say, not the core and essence of Christianity as it exists in the world today. Perhaps we should start thinking about an alternative constitution for the US which has the world's oldest constitution (236 years old!) while being the world's youngest advanced nation. Other societies including most European societies while being older than the US have newer constitutions. As far-sighted as the Founding Fathers were, a new and updated constitution incorporating not only political but also economic rights along the lines of the UN Declaration of Human Rights would do much to right the wrongs and shortcomings of present day America and the world.

February 17, 2012

Part 2 covering the Bush Sr, Clinton, Bush Jr and Obama years can be found here.

We rely for data for this blog on the Federal Individual Income Tax Rates History for income years 1913 to 2011 put out by taxfoundation.org. Also Historical Capital Gains and Taxes put out by the Tax Policy Center of the Urban Institute and the Brookings Institution and the Social Security and Medicare Tax Rates put out by socialsecurity.gov. We will report only on income tax rates for a married couple filing jointly. Tax rates for other classifications of people generally followed the same trajectories. It is a sordid history of how Republican Presidents Reagan and Bush Jr. lowered taxes on the rich, raised taxes on the poor and middle class and drove up the US national debt. Let's start with tax year 1980 the first year Reagan occupied the White House. The tax rates that year were carried over from the Carter Presidency. It took a couple of years for Reagan to get his tax cutting Mojo working. In 1980 the income tax table was the following. All amounts are adjusted for inflation.

The first thing to notice is that there are 16 tax brackets. Over the ensuing years the number of tax brackets would be reduced under the guise of simplification, but really what this reduction amounts to is a "flattening" of the tax code on the way to that conservative Valhalla - the flat tax. The second thing to notice is that the highest tax rate is 70%. That would be reduced in coming years to less than half that amount giving a huge bonus to the rich. The third thing to notice is that the highest marginal tax rate applies to incomes over $586,546. That means that for higher incomes - and incomes well over $1 million were not that uncommon in 1980 - there were no additional tax brackets at higher marginal tax rates. This tendency not to progressively tax the highest incomes is a feature that will be accentuated in the terms of Republican Presidents over the next 30 years. Clinton "unflattened" the tax code adding three new brackets at the high end while keeping taxes on the poor and middle class constant. However, in Clinton's second term under a Republican controlled Congress, the capital gains tax affecting mainly the rich was lowered exemplifying the fact that Congress has much more control over taxes than does the President. Reagan and Bush Jr primarily lowered taxes on the rich while Reagan also raised taxes on the poor as a concomitant.

In 1980 the maximum tax rate on long term capital gains stood at 28%. Also in 1980 the payroll tax (FICA and SECA) stood at 6.13% for employers and employees and at 8.1% for self-employed. FICA is the tax that employers and employees pay for social security and medicare; SECA is the tax the self-employed pay. Reagan and Greenspan would hike these rates spiking the rate for self-employed thus adhering to their philosophy of taxing the poor while lowering taxes on the rich since payroll taxes are a flat tax with no deductions, no exemptions. The poor while paying little if anything in income tax are still stuck with almost exhorbitant payroll taxes especially the self-employed. And when they retire, the poor self-employed get a relative pittance in benefits despite having paid in at the highest rates.

In 1981 the income tax table was not substantially changed keeping the same 16 tax brackets. However, the maximum tax rate on long term capital gains was lowered from 28% to 20%, a big reduction for the rich who have much more income from capital gains than do the middle class and the poor. While lowering taxes on the rich Reagan simultaneously raised them on the poor not through the income tax but by means of FICA and SECA taxes. Those rates increased from 6.13% to 6.65% for employers and employees and from 8.1% to 9.3% for the self-employed.

The first thing to notice here is a reduction in the progressivity of the tax code since 16 brackets have been reduced to 13 eliminating the top three tax brackets altogether! The top tax bracket starts at $199,035, a brazen tax giveaway to the rich! The lowest taxable bracket starts at roughly $7906. rather than $9258 as it did in 1980, a slight increase on the poor. There are also slight increases on the middle class throughout the tax code.

The maximum long term capital gains tax rate remained steady at 20% while FICA and SECA taxes were raised slightly. So we have seen taxes on the rich diminish remarkably in the second year of Reagan's Presidency by means of the capital gains rate and in the third year by means of the income tax table while at the same time taxes on the poor and middle class were raised through the FICA and SECA tax rates. FICA and SECA taxes are regressive since the same rate applies to all incomes up to a certain cap and beyond the cap there is no payroll tax so the rich get off scot free above a certain income level which in 2011 was $106,800. In 1982 there was a flattening of the income tax code brackets and a raising of the already flattened payroll taxes. The lesson to be learned from the early Reagan years is that taxes were lowered primarily on the rich due to the elimination of the upper three income tax brackets and the lowering of the capital gains tax while they were raised on the poor and middle class primarily through the FICA and SECA taxes.

The following table represents the effects of the "Tax Reform Law of 1984."

Consider the top tax bracket. It remains the same as in 1982 at 50%. However, it doesn't start till an income of $350,715 instead of $199,035 in 1982 thus lowering taxes on the rich again. The 0% tax bracket ends at a lower dollar amount thus raising taxes slightly on the poor again. Consider the middle tax rate of 25.0%. It starts at $46,969 and ends at $57,199 in 1982 while it starts at $53,125 in 1984 and ends at $64,571. This represents a slight lowering on the middle class as well.

The capital gains rate remained the same at 20% while FICA and SECA taxes were given a huge jolt. They were raised from 6.7% and 9.35% respectively in 1982 to 7% and 14% respectively in 1984. This represents a huge increase in regressivity and taxes on the poor and middle class for the self-employed.

In 1986 there were no major changes to the income tax code - only adjustments for inflation. Capital gains tax remained constant at 20%. There were increases in FICA and SECA taxes though. Again taxes on the poor and middle class were raised under Reagan's Presidency. They now stood at 7.15% and 14.3% respectively.

Now in 1987 accordning to the Tax Reform Act of 1986, there were major changes to the income tax code. Here are the tables for 1987:

The number of tax brackets has been drastically reduced from 15 to 5 thus flattening the tax code once again and reducing taxes on the rich! The top tax rate applies to incomes over $177,766 whereas that rate in 1984 applied to incomes over approximately $100,000. Taxes on the poor are raised as well since the 0% tax rate is eliminated entirely! However capital gains taxes are raised back to 28% due to the fact that Democrats took control of Congress in 1986. FICA and SECA taxes remain the same as they were in 1986.

In 1988 the income tax code is radically flattened again.

Table 5 - 1988 - Married Filing Jointly

Marginal Tax BracketsTax RatesOverBut Not Over

15.0% $0 $56,42728.0% $56,427

_______________________________________________

This flattening raised income taxes on the poor considerably by dropping the lowest tax bracket altogether. At the same time it lowered taxes on the rich by dropping the upper two tax brackets! Capital gains tax stayed at 28% while FICA and SECA taxes increased considerably from 7.15% and 14.3% respectively to 7.51% and 15.02% respectively. Thus a double whammy in tax increases for the poor was perpetrated while reducing them drastically for the rich.

All in all the Reagan years under the tutelage of Alan Greenspan were a disaster for the poor and middle class and a bonanza for the rich. The income tax was drastically flattened reducing progressivity while FICA and SECA taxes which are regressive because one rate fits all were raised. For most of Reagan's Presidency capital gains tax was kept low at 20%, another tax giveaway to the rich. However, when Democrats regained control of Congress in 1986, the capital gains tax rate was raised back to 28% where it had been when Reagan entered the Presidency and Republicans controlled Congress. There is a pattern here. Republicans use the tax code to benefit the rich and shift the burden of paying for government to the poor and middle class while Democrats lower taxes on the poor and middle class and raise them on the rich. In 1983, on the recommendation of his Social Security Commission— chaired by none other than the man he later made Fed chairman, Alan Greenspan—Reagan called for, and received, Social Security tax increases of $165 billion over seven years. So it was Alan Greenspan, that Ayn Rand inspired "rock star" of economics, who was primarily responsible for raising taxes on the poor during the Reagan era. Although the pretext for this huge increase in social security and medicare taxes was the fact that at some point the social security trust fund would run out of money, the increase in government revenues was just spent in the government's general fund thus effectively using a huge increase in regressive taxation to fund the government not to provide security for retirees. At the present time despite a supposed $2.5 trillion in the social security trust fund, Republicans are again maintaining that social security is broke and needs "fixing," the fix they recommend being to privatize it.

Finally, we note that Reagan tripled the national debt from approximately $1 trillion to $3 trillion. George W Bush doubled it from $5 trillion to $10 trillion. The two biggest tax cutters (on the rich) were also the two biggest adders to the national debt!

October 19, 2011

While it remains to be seen whether the Occupation of America, from Wall Street to San Diego, will be able to sustain its amazing initial momentum, it has unquestionably struck a nerve and sparked a national discussion about class, power, and politics. The heavy weights at the New York Times have recently staked out an interesting range of opinion on the occupation movement. You have Paul Krugman, the paper’s reliable progressive, observing the panic of the plutocrats and astutely noting that, “The way to understand all of this is to realize that it’s part of a broader syndrome, in which wealthy Americans who benefit hugely from a system rigged in their favor react with hysteria to anyone who points out just how rigged the system is.”

This has been followed by the less hysterical reactions of the paper’s liberal to moderately conservative hegemonists, Thomas Friedman and David Brooks, whose takes on Occupy Wall Street range from cautious skepticism to condescending dismissal. Friedman’s column on the protests starts by citing Austrian author Paul Gilding who argues that the American and global uprisings:

“are a sign that the current growth-obsessed capitalist system is reaching its financial and ecological limits . . . Occupy Wall Street is like the kid in the fairy story saying what everyone knows but is afraid to say: the emperor has no clothes. The system is broken . . . This particular round of protests may build or may not, but what will not go away is the broad coalition of those to whom the system lied and who have now woken up. It’s not just the environmentalists, or the poor, or the unemployed. It’s most people, including the highly educated middle class, who are feeling the results of a system that saw all the growth of the last three decades go to the top 1 percent.”

Friedman then counterbalances Gilding’s take with the views of John Hagel III who argues that the new opportunities of the global economy have resulted in “a huge global flow of ideas, innovations, new collaborative possibilities and new market opportunities. This flow is constantly getting richer and faster. Today, they argue, tapping the global flow becomes the key to productivity, growth and prosperity. But to tap this flow effectively, every country, company and individual needs to be constantly growing their talents.” He then predictably concludes that his “heart is with Hagel” and his “opportunity-based” narrative rather than the “threat-based” narrative of Gilding but he thinks we ignore Gilding’s points at our peril.

…let’s hope that Occupy America is a sign that people are beginning to wake up…

Finally we have the sage of the affluent suburbs, David Brooks, the conservative every NPR-listening-liberal wishes was the face of the loyal opposition rather than that of the snarling tea baggers. His take on the occupation of America is patronizing at best:

If there is a core theme to the Occupy Wall Street movement, it is that the virtuous 99 percent of society is being cheated by the richest and greediest 1 percent. This is a theme that allows the people in the 99 percent to think very highly of themselves. All their problems are caused by the nefarious elite. Unfortunately, almost no problem can be productively conceived in this way. A group that divides the world between the pure 99 percent and the evil 1 percent will have nothing to say about education reform, Medicare reform, tax reform, wage stagnation or polarization. They will have nothing to say about the way Americans have overconsumed and overborrowed. These are problems that implicate a much broader swath of society than the top 1 percent.

Brooks follows this up by knocking down the strawman argument that taxing or taking the wealth of the top 1% would eliminate the federal deficit as if that was the key point of the entire protest. His answer is to look toward the “boring” folks proposing real policy solutions that make use of “market forces.” It’s the insiders like Sam Nunn, Pete Domenici, and former Clinton staffer Matt Miller who are the real visionaries, not the “milquetoast radicals” occupying Wall Street.

What is interesting about this discussion in the Times is that: 1) these elite columnists think it’s necessary to opine on the subject of the occupation; and 2) that the usual apologists for neoliberal globalization and corporate hegemony are both struggling to find a way to avoid basic facts just as their colleague Krugman suggests. This makes for some interesting ideological maneuvers.

The Friedman strategy is a kind of inoculation—acknowledge the obvious through another writer’s words but hold it at a distance and don’t address the key point about real economic power while shifting the discussion to a more comfortable ideological frame with regard to globalization (the world is “flat” remember?). Hence, Friedman is not in favor of a global system that benefits the economic elite, he is for “opportunity.”

The Brooks strategy is to pooh-pooh the very notion of an elite altogether as a simplistic fantasy, a facile oversimplification by the simple-minded rabble on the streets. Clearly only these conspiracy nuts who don’t read his columns regularly enough to know that Pete Domenici is out there fighting for us are a silly bunch indeed.

By obfuscating the very real existence of the American and global elite, Friedman and Brooks do what they always do and what much of what constitutes American mainstream political and economic discourse always does: fail to give Americans an accurate cognitive map of political and economic power. This is crucially important because if people don’t have the tools to clearly understand the nature of power, they don’t know how to contest it and frequently place blame for our country’s problems in the wrong places.

But let’s hope that Occupy America is a sign that, despite the obstacle of a corporately owned media system, people are beginning to wake up.

While recent discussions of the “Buffet rule” have focused people’s attention on the fact that the rich have gotten richer while the rest of us have suffered, they have also exposed the truth that, as opposed to the decade’s old mantra of the anti-tax zealots, the affluent pay a smaller percentage of their income in taxes than the rest of us. The rich have gained, the poor are poorer, and the middle class is shrinking. You don’t have to have a Nobel Prize in economics to know that this is not fair.

What this phenomenon has done is push us further towards plutocracy or the rule of the dollar. And for those out there who think this is a conspiracy, all one need do is check out the activities of American Legislative Exchange Council, or ALEC.

What is ALEC? As the Center for Media and Democracy’s ALEC Exposed website explains:

ALEC is not a lobby; it is not a front group. It is much more powerful than that. Through ALEC, behind closed doors, corporations hand state legislators the changes to the law they desire that directly benefit their bottom line. Along with legislators, corporations have membership in ALEC. Corporations sit on all nine ALEC task forces and vote with legislators to approve “model” bills. They have their own corporate governing board which meets jointly with the legislative board. (ALEC says that corporations do not vote on the board.) Corporations fund almost all of ALEC’s operations. Participating legislators, overwhelmingly conservative Republicans, then bring those proposals home and introduce them in statehouses across the land as their own brilliant ideas and important public policy innovations—without disclosing that corporations crafted and voted on the bills. ALEC boasts that it has over 1,000 of these bills introduced by legislative members every year, with one in every five of them enacted into law. ALEC describes itself as a “unique,” “unparalleled” and “unmatched” organization. We agree. It is as if a state legislature had been reconstituted, yet corporations had pushed the people out the door.

More specifically ALEC (which is 98% corporate funded) pushes a corporate agenda at the international, national, state, and local levels with regard to union busting, workers’ rights, the privatization of education, healthcare, the environment, energy, agriculture, voting, taxes, prisons, immigration, and much more. It is not a conspiracy of the imaginary “nefarious elite” as David Brooks puts it; it is how the very real economic elites have high-jacked our government at every level. It’s how the Koch brothers’ money talks and democracy walks. To put it another way, this is what plutocracy looks like.

To review ALEC’s activities on a state by state level, see where their money comes from and which politicians are part of the organization, see: www.alecexposed.org.

October 01, 2011

President Obama can get on the stump and promise action to create more jobs, tax the rich, defend the middle class, have the government provide more Pell grants, take care of children in poverty, whatever... But he need not say all that because, even if he's reelected, he can provide none of it unless the Democrats have a majority in the House and a filibuster proof majority in the Senate which translates to 60 Senators. If the statistics in Congress don't align, Mr. Obama will accomplish exactly nothing even if he gets four more years. Therefore, the most honest campaign speech he can make is "If you elect a majority of Democrats in the House and 60 Democrats in the Senate, I will give you x number of jobs on Day 1 of my second term. Otherwise, you will get nothing but gridlock for the entirety of my second term because the Republicans in Congress will block everything I propose." All this emphasis on what Mr. Obama can or cannot do is ridiculous if he doesn't have the power to do it, and the only way he will have the power to do anything is if he has a Democratic Congress and a filibuster proof Democratic Senate. Mr. Obama has shown that he is not bold enough to defy convention, and the conventional wisdom is that the executive branch in and of itself can do nothing except fight wars and plead with Congress.

Sure now it seems Obama has gotten over his predilection for appeasing the Republicans in Congress realizing that it's absolutely futile to believe in "compromise" with that bunch of jive turkeys. Today he's talking tough, but he's resigned to doing nothing. Might as well start campaigning now for 2012 because nothing will be getting done by government until after the election a year from now. But nothing will get done even then if Mr. Obama doesn't have an agreeable Congress to go along with him, and, reading the tea leaves, it doesn't seem that Democrats will be elected in large numbers unless Democrats including Mr. Obama start making that clear now. Congress has a low approval rating, 12%, which tells the American people "throw the bums out," the good ones along with the bad. In other words the American people will throw out the baby with the bath water unless they start to discriminate between Republicans and Democrats in Congress and start to realize that the blame for nothing getting done lies with the REPUBLICANS IN CONGRESS and not just with some kind of generic CONGRESS. Americans are simple minded. You have to spell it out for them. The campaign of 2012 is not just for the Presidency as if that were the all important thing. No, it's for the Presidency AND Congress combined, and, if the right balance isn't achieved, that is to say a Democrat in the White House and a Democratic controlled House and Democratic controlled filibuster proof Senate, then the American people might as well say bye-bye to solving the deficit problem by taxing the rich and solving the jobs problem by government direct creation of jobs.

The fact of the matter is that corporations and the wealthy are sitting on $2 trillion in cash. They could hire more workers if they wanted to without any additional tax breaks or loans from Wall Street, but they obviously don't just want to hire workers for the sake of hiring workers. They will only hire workers if it adds to their bottom line. A lot of Democratic oreiented economists like Reich and Krugman are saying they will only hire workers if there is more demand so, therefore, we need to use Keynesian economics to pump money into the economy to create demand. However, why would corporations hire more workers even if there were more demand when instead they could make more capital investment in automated and computerized machines? If they are given economic incentives, they will preferably use the money to invest in robots and other computer driven equipment to increase output like they've been doing for the last 20 years. They have driven up productivity not by hiring more workers but by investing in intelligent machines and laying off workers. There is no reason to believe they will do anything different even if demand suddenly increases. Therefore, Obama's economic advisers are full of you know what. Nothing the government can do in the way of giving incentives to corporations to hire more workers will actually work because it makes more sense to them to invest in capital equipment which can work 24 hours a day and doesn't require expensive health insurance.

So where does that leave the government's role in creating jobs even if, come 2012, there should happen to be elected by some miracle a Democratic President and a Democratoc Congress. As I see it, it only leaves one alternative: direct job creation by the Federal government as was used during the Great Depression when FDR created jobs with the Civilian Conservation Corps and the Work Projects Administration. And money has to be funneled off of the most profitable upper few percent of the population who have obtained the lion's share of the national income over the last 30 years in order to make this possible so that the nation doesn't go even more deeply into debt. Class war, anyone? It comes down to taking from the rich in order to dole out welfare benefits or taking from the rich in order to put the poor and lower middle class to work in CCC and WPA type jobs. Lord knows, there's tons of work both in conservation (think environmental rehabilitation) and infrastructure repair and development so that direct government job creation in those areas would be anything but make work. Jobs in those areas are much needed and vital to the overall economy not to mention the general welfare of the people. And private enterprise will never create those jobs unless it is given contracts to do so by the government which would entail much more money in order to build in large profits to the private sector which are not necessary if government provides the jobs directly. Think about all the money that has been wasted by lavishing it on private contractors in Iraq and Afghanistan.

Obama's economic team including Fed Chairman Bernanke seems to think that the key to getting the economy moving is to make interest rates so low that loans will be easy to get as if the only thing holding the private sector back from expanding and hiring workers is the ease with which they can get a loan. But this is belied by the fact that the corporations don't need loans to expand: THEY ARE ALREADY SITTING ON $2 TRILLION IN CASH. Why do they need to borrow money? Duhhh! How stupid are these people? They are deluded to think that the only way things get done in this economy is to create more debt. Why would I borrow money to do something if I am sitting on all the cash I would ever need to do it and more? Obama made the mistake of taking advice from Larry Summers and Tim Geithner, Wall Street types who think the only way to get the economy moving is to cater to Wall Street and appease the rich by giving them even more favors: deregulation and lower taxes. This top down approach hasn't worked. That should be obvious by now! Instead the rich are richer than ever, more and more money has been funneled to the top 2% and middle class interests have been neglected. People have lost their homes who shouldn't have had to if the government had acted in their interests. Now investors are sueing the big banks because they were screwed. But what about the people who lost their homes to foreclosure? Little if anything is being done in their behalf.

All in all, it's not all about Obama. If he's not elected in 2012 and Republicans run the table, God help us. The US will become a nation of serfs and a small class of economically powerful and dominant aristocrats. The safety net will be eliminated and more and more people will become homeless and die on the streets for lack of health care. Children's growth will be stunted and they will become increasingly ignorant and uneducated. The country will be by, for and of the rich and powerful. Better to have Obama reelected and a Republican Congress which will mean nothing will get done for four more years, but even that is better than sliding back into another Dark Age. The best scenario, however, would be that Democrats control the Presiency and Congress. This would also guarantee that a liberal would be appointed to the Supreme Court when a vacancy occurs which is very likely in the next 5 years and which would tilt the balance there from the conservative oriented majority which now obtains. If such were the case, then America might well be back on the path towards being a sane and progressive nation again instead of the repudiation of Enlightenment values it was founded on which it is now in danger of becoming.

August 05, 2011

There was no hue and cry when George W Bush was doubling the national debt. Bush started two illegal, unpaid for wars, gave huge tax breaks to the wealthy and instituted a pharmaceutical benefit for seniors that was again unpaid for. All these programs which were inherited by Obama were based on borrowed money and hence their net effect was simply to increase the national debt. In order to get the national debt under control all that would be necessary would be to reverse these Bush era programs, but Republicans want to stick Obama with these Bush institutionalized deficits instead. Republicans and Democrats went along with all this dutifully raising the debt limit whenever Bush asked them to. Now Republicans are screaming bloody murder about the debt, but they have not deinstituted Bush's programs that are still causing it. They haven't let Medicare negotiate prices with the pharmaceutical industry; they haven't done away with the Bush tax cuts although Obama has tried to get them to. Instead, they put Obama's back to the wall and demanded that the Bush tax cuts continue. They are due to expire at the end of 2012, and that is the primary reason why Obama insisted on a debt ceiling deal that would carry us through 2012. If there had been another debt ceiling fiasco around Christmas of 2011, Republicans would have held Obama hostage over the Bush taxs cuts forcing him to not let them expire or they would shut the government down. The current debt deal wisely avoids this scenario. Obama is trying to wind down Bush's stupid wars in a way that doesn't raise Republican ire, but he is not doing it fast enough. They are still consuming far too much money.

The debt ceiling deal provides for a commission that will get absolutely nowhere which will result in an automatic spending trigger which will provide for significant cuts to the Pentagon in addition to scaling back social programs. The fact that there will be significant cuts to the Pentagon is a stroke of genius on Obama's part. So I don't think the debt deal was such a bad agreement from Obama's point of view. He managed to put off the most significant cuts in social programs until the "out years." This means that nothing much will happen until after the next elections. If Democrats win big at that time they can undo whatever damage was done by any deals they made with Republicans. Nothing is set in stone that the next Congress cannot fix.

The Republican modus operandi for some years has been to vote against anything that would make a Democratic President look good in order to get the American people to vote against him in the next election putting a Republican in the White House. So this creates the conventional wisdom that a Democratic President doesn't know how to get anything done no matter how good his ideas or proposals are. Democrats have then obligingly gone along with Republican Presidents to get things done because they are not quite as venal and dastardly as Republicans and are more interested in helping out the American people. Consider Richard Nixon. Although no dirty trick was beneath him in order to obtain the Presidency, Nixon governed as a liberal. He established the Environmental Protection Agency, ushered in the first Earth Day, made an opening to the Chinese communists, something no Democrat would have dared to have done because of the expectation of a huge Republican outcry, tried to put together a National Health Care plan which was cut short by his impeachment, imposed wage and price controls, created Supplemental Insurance Income and on and on. The Republciacn MO in those days was to give the American people what they wanted but only when a Republican was in the White House. Otherwise, fight against any improvement in the lot of the American people thus convincing said people that the only way to get anything done was to put a Republican in the White House.

Then along came Jude Wannisky with a better idea, the Two Santa Claus Theory. The part about resisting any progress when a Democrat was in the White House remained the same. But instead of governing as a liberal, what the Republicans would do was to give everybody a tax break and put it on the American credit card. The idea was to run up the debt as much as possible, spend like a drunken sailor, create the ambiance of prosperity and then scream bloody murder about the debt after a subsequent Democrat was elected President. This would put Democrats in a bind because they would not be able to implement any social programs such as those implemented by Nixon. Their only job would be to clean up the elephant poop after the parade was over. This would further contribute to the conventional wisdom that the only way to get anything done was to elect a Republican President. This worked because Congressional Democrats were not as shameless as Republicans and would go along with Republican initiatives, if they thought they would benefit the American people, even when they did not hold the Presidency.

These techniques have been raised to an art form under the Obama Presidency. Republicans will not let any legislation pass that would in any way be considered a victory for Obama even if the legislation represents Republican ideas and no matter how much the lack of it harms the American people. By so doing they hope that the American people will blame Obama for not getting anything done and not notice that the real reason nothing gets done is Republican Congressional obstructionism. Even when Democrats controlled both Houses of Congress, as they did during the first two years of the Obama Presidency, Republicans used the filibuster in the Senate to prevent a whole slew of legislation, such as the legislation that would have closed the loophole giving tax breaks to corporations that ship American jobs overseas, from getting passed. Now that they control the House, their mission is even easier. They simply will not bring to a vote any Democrat inspired legislation, or if they did, they would simply vote it down because they have a majority. They don't even need to use the filibuster.

Only this time, after they get a Republican elected President in 2012, he or she will not pull a Nixon and govern as a liberal. Their far right philosophy is too much ingrained for that to happen. This time, even though the American people might be yearning for a "can do" President, what they will get instead is the opportunity to jump out of the frying pan and into the fire. If Republicans control both Houses of Congress and the Presidency after the 2012 elections, what the American people will get is the complete elimination of all social programs unless Democrats use the filibuster in the Senate to stop them. They will get lower taxes for millionaires and billionaires and higher taxes for the poor and middle class. (Expect payroll taxes to increase.) They will get class warfare in the extreme while being called out for engaging in class warfare themselves by the likes of Rush Limbaugh. One Republican tactic is to accuse the other side of doing the very thing they themselves are doing. The Tea Party will stop worrying about the National Debt because that will be what their minders want them to do. Instead the push will be on for "revising" Medicare, Medicaid and Social Security, deregulating corporations, lowering corporate taxes while lobbyists drill new loopholes in the "lower" taxes, privatizing public schools, parks, libraries, fire and police forces, getting rid of unions and converting all public employee defined benefit pension plans to 401ks. What's happening in Wisconsin, Ohio, Michigan and some other states will have been only a prelude to what will happen on a national scale. The American people, despite opinion polls to the contrary, will not figure into any Republican calculations and their way of life will be decimated before their very eyes with them powerless to do anything about it. This is the morass that the conventional wisdom - that a Democrat can't get anything done while a Republican "can do" - will lead us into. This is the race Mitt Romney is gearing up for.

While the Republicans in Congress are determined not to give the Obama administration any "victories" which might actually make the lot of the American people better, and to force his back to the wall and demand that he implement the Republican agenda, the American people are too dumb to figure out what's happening. They will be swayed by the billions of dollars which will be poured into TV advertising that Obama's administration was a bust and that, in order to have "Morning in America," they must elect Republicans in 2012. If they are so led and if they so comply, they will be treated to Republican economic policies which will eliminate even more American jobs while creating tons of them overseas, the homeless population will mushroom, middle class people will be forced out onto the streets in droves while the economy goes into a tailspin. But while this is happening corporate balance sheets and CEO salaries will continue to skyrocket. Any talk by Democrats of a "jobs program" will be branded as socialism. The next Republcian President will fill a couple of Supreme Court vacancies with hard right Republicans thus guaranteeing that Republcian policies and laws will prevail into the next millenium. Any agencies that protect the American people will be defunded even if they are allowed to continue to exist. Workers will lose all the rights that their forefathers fought so hard for. Federal tax receipts will come less from corporations and billionaires and more from the working poor. The sick, the elderly and the disabled will have to rely on church based charity and forego any hope of help from their government. Hoovervilles (Romneyvilles?) will spring up all over the country.

Republicans are recreating the Great Depression and doing it with a vengeance. Their policies are ideologicaally based, not pragmatic, and they are bound and determined to thwart the will of the people in order to create a libertarian utopia. It doesn't matter to them how much harm they do to the average American or what the average American wants from government. Their mantras of small government, privatization of any and every public agency or program will carry the day despite any cost. According to them the Great Depression should have been allowed to proceed as long as corporate profits were up. The fact that unemployment was 25% was no big deal. Their advice to the unemployed: "Get a job, you lazy, shiftless suckers!" The prison-industrial complex will continue to expand especially for people of color who will find themselves incarcerated for drug offenses and petty crime while fraudulent bankers and rating agencies will only be bailed out when they get in trouble. Thus a libertarian utopia will have been achieved in which there is a small class of very wealthy people while the vast majority becomes increasingly immiserated. Sure, there will be a few lone voices crying out in the wilderness, a few disgruntled people who won't go along with the Republican program. They will be characterized as losers, socialists and people who have renounced the American dream.

June 04, 2011

Republicans are engaged in a dangerous game of brinksmanship over raising the debt ceiling. It’s a game that could end in disaster.

The US is a debtor nation, and as such, we are desperately dependent upon good credit. So far, we have been able borrow and borrow at favorable rates because “the full faith and credit of the US government” stands behind every bond, every borrowed dollar.

But that could change if Republicans continue their cynical game of economic chicken.

What Republicans risk, even if they eventually capitulate and raise the debt ceiling, is the loss of this faith, and the unprecedented catastrophe that loss would bring on.

If the international community even suspects the US will routinely consider not honoring its debts, the cost of money for US industry, consumers and government would skyrocket almost overnight, bringing on the mother of all depressions, possibly with simultaneous inflation.

Republicans claim they’re doing this because they’re genuinely alarmed by the deficit, and that it poses a clear and present danger to us.

Let’s be clear. Republicans don’t give a damn about the deficit. Here’s the proof.

Fact: The Ryan budget – which Republicans voted for and support with an almost religious fervor – doesn’t achieve a balanced budget until 2063.

Why does it take so long? Because balancing the budget isn’t really the point. In fact, Ryan's budget adds at least $62 trillion to the debt between now and 2063 – so much for their faux emergency.

In reality, the Ryan budget is a stealth vehicle designed to pass a nightmarish wish list of very unpopular Republican giveaways to the rich and powerful, while repealing popular social programs.

For example, it cuts taxes on the highest wage earners from the current 35% down to 25%, it lowers corporate taxes by the same amount, it dismantles Medicare, guts Medicaid, eliminates regulations on Wall Street and the financial community, eviscerates Pell grants, establishes a process for “reforming” the Social Security program, and all but eliminates environmental protections – on an on it goes. By now, you know the drill – give trillions to Wall Street and the uber-wealthy, kill regulations that create a level playing field, and pay for it out of the hides of the middle class.

Fact: The People's Budget proposed by the Congressional Progressive Caucus creates a budget surplus by 2021, and for the most part, the proposals it uses to do it are supported by the majority of Americans.

If the deficit were a dire emergency worth risking the US’s financial credibility and a catastrophic economic meltdown, then surely eliminating the deficit by 2021 is better than eliminating it by 2063 and amassing an additional $62 trillion in debt in the meantime? Not if you’re a Republican. Nor, apparently, if you’re in the Obama Administration.

The bottom line is, Republicans created the economic crisis and the debt they are now brandishing as a weapon in a political war, precisely so they could mount a stealth attack on the New Deal programs Americans love, and they are risking America’s future prosperity to do it.

Right now, the media and the Democratic Party are feeble enablers of this reckless and dangerous strategy. Indeed, the Obama administration’s penchant for compromising with Republican lunacy is now so finely honed, one has to believe that if Republicans announced that we needed to sacrifice 100 virgins to fix the economy, Obama would stick out his chin and say, “No. We only need 50 – and I won’t sacrifice even one more than that.”

As Robert Reich pointed out in his June 1st blog, the US economy suffers from a demand deficit, not a budget deficit. And with industry sitting on more than $2 trillion in profits instead of investing it, that demand can come from only one place – government. This means revenue must be a part of any deficit reduction, if we are to achieve prosperity.

But with Obama arguing about the number of virgins we should sacrifice, instead of using to the Bully pulpit to back a serious budget proposal capable of creating prosperity, don’t count on it.

And as yesterday’s Congressional vote on raising the deficit ceiling shows, Democrats are petrified of being labeled soft on the deficit, so don’t look for leadership there, either.

Meanwhile, the media is lionizing Paul Ryan’s ludicrously self-contradictory budget, while ignoring a serious proposal that actually accomplishes what Republicans say we must accomplish.

Here’s the irony – Puff the Mighty Deficit Dragon was created to serve the interests of the rich and powerful, the ones who call the tune in Washington. The ones who set the politicians dancing and the media elite singing. But right now, the Mighty Deficit Dragon has gotten away from them, and is threatening to bring down the whole house of cards.

John Atcheson's writing has appeared in the New York Times, the Washington Post, the Baltimore Sun, the San Jose Mercury News, the Memphis Commercial Appeal, as well as in several wonk journals. He is currently at work on a fictional Trilogy that centers on climate change. Atcheson's book reviews are featured on Climateprogress.org. Email to: jbatcheson@gmail.com

May 21, 2011

We hear all this blather about how the US is such a wealthy nation. Not true. Before Ronald Reagan became President, the US was the world's largest creditor nation. People and countries owed us more money than we owed them. Now some 30 years later the US is the world's largest debtor nation. This is the definition of a poor - not a rich - nation. China on the other hand holds $3 trillion in international reserves including $1 trillion of US debt. Other nations have sovereign wealth funds which contain vast amounts of money. The US has only a huge pile of debt - some $14 trillion worth. The US used to be the world's largest importer of raw materials and exporter of manufactured goods. Now we're the world's largest exporter of raw materials and importer of manufactured goods with a trade deficit of some $600 billion a year. At the present time the US has a deficit of some $2 trillion in needed infrastructure repairs while China is building high speed rail track at such a rate that it will soon have more miles than the rest of the world combined. Meanwhile, the US spends more on its military establishment than the rest of the world combined while cutting safety nets and education for its own citizens.

Americans have pulled the wool over their own eyes. Despite having a national debt of $14 trillion, despite having gone from a net creditor nation to a net debtor nation in little over 30 years, despite having enormous trade deficits month after month, year after year, despite having an infrastructure in need of $2 trillion worth of repairs, Americans think they live in a wealthy nation. The truth of the matter is that the US is a poor nation within which live a lot of wealthy individuals. China on the other hand holds a little over $1 trillion of US debt making it a fairly wealthy nation albeit with a large but diminishing number of poor people. China is building new infrastructure at an astonishing rate. It's a fallacy to think a wealthy nation is a nation comprised of a large number of wealthy individuals. In fact many Banana Republics are comprised of a small class of wealthy individuals surrounded by a sea of poverty. The US is on track to becoming one of those. A recent survey showed that there is a higher level of inequality in the US than exists in Pakistan, Ethiopia and Ivory Coast.

It is not hard to diagnose why the US is a poor nation which thinks itself rich while China is a rich nation which passes itself off as being poor. All the free trade agreements like NAFTA and CAFTA have resulted in the decimation of the US manufacturing base. US factories are closing in droves:

2010 comes in the midst of a stunning wave of U.S. factory closings that stretches from coast to coast. Once upon a time America was the greatest manufacturing machine that the world has ever seen, but now it seems as though the only jobs available for working class Americans involve phrases such as “Welcome to Wal-Mart” and “Would you like fries with that?” Even though the population of the United States has exploded over the last several decades, the number of Americans employed in the manufacturing sector today is smaller than it was in 1950. America has become a voracious economic black hole that ”consumes” as much as possible and yet actually produces very little. The United States is becoming deindustrialized at a blinding pace, and it is becoming increasingly difficult for blue collar American workers to find jobs that will actually enable them to support their families. The sad truth is that American workers don’t have a whole lot to actually celebrate this Labor Day. 14 million U.S. workers are “officially unemployed” and tens of millions of others have been forced to take part-time or temporary jobs that they are overqualified for just so they can survive. Unfortunately, this is not just a temporary situation for American workers. As millions of good jobs continue to get outsourced and offshored, Labor Day celebrations in coming years will be even more depressing.

Since 2001, The U.S. Has Lost 42,400 factories. The "giant sucking sound" that Ross Perot predicted has become a point of actual fact. But this doesn't seem to bother America's leaders. They are dedicated to the policy that US consumption drives US GDP and as long as US GDP is the largest in the world, who cares? Sales are up! However China, as the world's second largest economy as measured by GDP, is on track to overtake the US in the near future. American politicians only care about transnational corporations, nominally American, and how they can maintain the US consumer appetite (and their profit margins) for buying their goods even though most of those goods are produced overseas. They coddle these corporations by lowering their taxes, having their lobbyists drill loophioles in the tax code and giving them a "tax holiday" during which they can "repatriate" their overseas capital and bring it "home" without any tax consequences.

The model of trickle down economics, long since discredited, is still being championed by right wing politicians with the result that the fig leaf of prosperity is being shredded to reveal a naked transfer of wealth from the middle class to the upper one per cent. Naked power grabs are becoming the order of the day as the recent vote to extend taxpayer subsidies to the five Big OIl companies, despite their being the most profitable corporations in human history, reveals. At the same time those same right wing policticians are demanding that the budget be balanced on the backs of the poor and middle class. While countries such as Norway fund their safety net with royalties from oil drilling, the US gives away its natural resources to oil corporations including BP which is not even headquartered in the US. The neocon model of privatization and eliminating safety nets, although unsuccessful in Argentina and Brazil, is achieving considerably more success when practiced here at home. Trade unions are being decimated. States are being turned into fiefdoms and dictatorships. Public education is being defunded. There is an all out assault on teachers, police and other public workers. The notion that government doesn't work and can't be trusted is being fostered.

The US is becoming the very definition of a Banana Republic. It is becoming a nation largely bereft of a middle class, a nation in which there exists a small class of extremely wealthy individuals surrounded by a sea of impoverishment, a nation of antiquated infrastructure, a nation in which there is no there there. All that exists is a diminshing probablity of getting rich or even making it into the middle class. Students are being saddled with immense and obscene amounts of student loan debt. Middle classers are losing their homes to foreclosure. Poor people are being shunted aside as food stamp programs are being shut down and home heating oil allowances are drying up. The war on the poor is raging. And the American people continue to vote the guys that are screwing them into office because they pander to them with promises of unlimited rights of gun ownership and promises that they won't allow gays to marry

The US in point of fact is not a wealthy nation despite attempts to brainwash us that it is, and it's becoming poorer by the hour. But instead of implementing a rational health care system, we continue to give away billions to the pharmaceutical companies that we wouldn't have to if the government weren't prevented by law from negotiating with them. We continue to give away billions in subsidies to Big Oil and Big Agriculture. We continue to give away billions in tax breaks to the rich. We continue to pour billions down ratholes in Afghanistan, Pakistan, Iraq, Israel and many other places. .

These countries are taking us for a ride, and the Israeli President Netanyahu lectures our President on why he won't cooperate to bring about mideast peace. They are manipulating us out of our money while actually working and fighting against us as revealed by Pakistan's harboring of bin Laden. If Obama had tried to coordinate bin Laden's capture with Pakistan instead of going it alone, bin Laden would probably have been tipped off with the result that the Seals, to Obama's embarassment, would not have found bin Laden at home. What, no bin Laden? Just innocent women and children.

As China eats the US' lunch and the rest of the world rips off Uncle Sucker for billions of US taxpayer dollars, the American people should get used to the fact that we're not number 1 any more. Far from being the world's richest nation we're fast becoming one of the world's poorest nations where some of the world's richest people happen to reside. But don't worry about them. They also own villas in France, Italy and Spain. They only continue to hold US citizenship as a convenience. They could live anywhere. They could headquarter their corporations anywhere. It's still convenient for them to headquarter here so they can use their lobbyists to rip off American taxpayers and sell into the American consumer market. But as time goes on most of their sales will be to emerging consumer markets in China and elsewhere.

May 05, 2011

Paul Ryan is just the latest Ayn Rand aficionado to try to use government to benefit the rich and to denigrate the poor. Former Secretary of the Treasury under Reagan, Alan Greenspan, was a huge Ayn Rand aficionado who took a flower arrangement in the shape of a dollar bill to her funeral. But who is Ayn Rand and why is she so influential? Ayn Rand was Russian born. She moved to the US in 1926. Her father's pharmacy was confiscated during the Russian Revolution. Ayn Rand's biggest successes were her novels, the Fountainhead and Atlas Shrugged. Her philosophy of extreme egosim and selfishness is solipsistic to the max, bordering on sociopathic. Rand and German philosopher Friedrich Nietzsche both shared a fondness for "the Superman," the Ubermensch, and eschewed the ordinary Joe Blow. Her philosophy elevated the rich, the powerful, the brilliant, the talented above people who were only average or below average in their capabilities. The merely average she called parasites turning on its head Marx' philosophy which considered the wealthy class the parasites and the middle class the productive workers. To Rand the poor in all aspects were the parasites.

Is it any wonder then that Ayn Rand acolyte Paul Ryan's budget attempts to balance the Federal budget on the backs of the poor while giving tax breaks to the wealthy? Certainly Alan Greenspan attempted the same thing in his advice to President Reagan. A handy device was raising social security taxes which had the effect of balancing the budget on the backs of the poor. Reagan's 1984 tax reform act raised social security taxes by 50% on the self-employed. Rather than putting the $2.5 trillion raised by such a move in a "lock box" for future generations of retirees, it was just spent in the general fund with the result that the Social Security Trust Fund now containes $2.5 trillion of worthless IOUs, which now Republicans don't want to honor. As it turns out, surprise, surprise, it was merely a device to partially balance the budget on the backs of the working class poor without raising taxes on the wealthy. And remember it was Greenspan who got real concerned about inflation if working class wages started going up faster than he thought they should.

Ayn Rand based her main protagonist, Howard Roark, on a notorious serial killer by the name of William Hickman. Hickman kidnapped and killed a 12 year old girl and then extorted a ransom from her father who thought she was still alive. Rand admired Hickman's complete defiance of societal norms and complete disregard for anyone but himself. Rand considered Hickman a "Superman" because he lived only for himslf and had no empathy for anyone else. In other words he was a complete sociopath.

One reason most countries don't find the time to embrace Ayn Rand's thinking is that she is a textbook sociopath. In her notebooks Ayn Rand worshiped a notorious serial murderer-dismemberer, and used this killer as an early model for the type of "ideal man" she promoted in her more famous books. These ideas were later picked up on and put into play by major right-wing figures of the past half decade, including the key architects of America's most recent economic catastrophe -- former Fed Chair Alan Greenspan and SEC Commissioner Chris Cox -- along with other notable right-wing Republicans such as Supreme Court Justice Clarence Thomas, Rush Limbaugh and South Carolina Gov. Mark Sanford.

The loudest of all the Republicans, right-wing attack-dog pundits and the Teabagger mobs fighting to kill health care reform and eviscerate "entitlement programs" increasingly hold up Ayn Rand as their guru. Sales of her books have soared in the past couple of years; one poll ranked Atlas Shrugged as the second most influential book of the 20th century, after the Bible.

Ayn Rand's philosophy represented a sort of bastardized Nietzscheism. Rand's philosophy mirrors Nietzsche's adoration of the "Superman" and his amorality as presented in his book, Beyond Good and Evil. Nietzsche's rejection of Judeo-Christian morality mirrors Rand's atheism. Republican budget whiz Paul Ryan is just a latter day reincarnation of Ayn Rand. He requires his staff to read her books. The lineage goes back to Nietzsche who also inspired Hitler in his rejection of conventional morality and admiration for the Superman whose "will to power" takes matters into its own hands without any consideration for the lives of others.

Nietzsche's growing prominence suffered a severe setback when his works became closely associated with Adolf Hitler and the German Reich. Many political leaders of the twentieth century were at least superficially familiar with Nietzsche's ideas, although it is not always possible to determine whether or not they actually read his work. Hitler, for example, probably never read Nietzsche, and if he did, his reading was not extensive, although he was a frequent visitor to the Nietzsche museum in Weimar and did use expressions of Nietzsche's, such as "lords of the earth" in Mein Kampf. The Nazis made selective use of Nietzsche's philosophy.

What did Rand admire so much about Hickman? His sociopathic qualities: "Other people do not exist for him, and he does not see why they should," she wrote, gushing that Hickman had "no regard whatsoever for all that society holds sacred, and, with a consciousness all his own, he has the true, innate psychology of a Superman. He can never realize and feel 'other people.'"

In this she shared the philosophy of Neitzsche and Hitler. The Tea Baggers and Libertarians of today such as Alan Greenspan, Paul Ryan and Clarence Thomas share the same philosophy. It gets translated into a disdain for the poor and the middle class and an admiration of the powerful and the wealthy. This is the ideological basis of Republicanism circa 2011. They have no regard for the unemployed, the homeless, those struggling to make a living. They only admire those who have a "will to power" and are willing to cut corners and take ethical shortcuts to get there, no matter whom they trample in the process. These are the kinds of people Republicans seek to use government to protect and promote. This is at the heart of their efforts to destroy Medicare, Medicaid and Social Security and turn them over to private interests, the interests of the ubermensch, and take them out of the domain of the pedestrian government bureaucrats.

Ayn Rand wrote in her notebook that Hickman represented "the amazing picture of a man with no regard whatsoever for all that a society holds sacred, and with a consciousness all his own. A man who really stands alone, in action and in soul. Other people do not exist for him, and he does not see why they should." So her hero was a man lacking the slightest degree of human compassion or empathy, who used people to the maximum extent, and had absolutely no qualms about the suffering he caused others. Hitlerism exemplified exactly the same philosophy, which was mainly directed at the Jews, although Hitler also killed Germans who were mentally defective or homosexual. Ayn Rand, nominally a Jew herself, was just an equal opportunity persecutor to those at the bottom of the social pyramid, those she considered parasites. Instead of directing her philosophy against one ethnic group or another, her victims were all those who had some degree of human compassion and were not supermen willing to defy all social norms in order to promote their own solipsistic self-interest.

For Rand, Nietzsche and Hitler selfishness is a moral good, altruism a moral weakness. It's all basically the same philosophy. Who are the weak, the parasites? Those on welfare, basically. "What's really unsettling is that even former Central Bank chief Alan Greenspan, whose relationship with Rand dated back to the 1950s, did some parasite-bashing of his own. In response to a 1958 New York Times book review slamming Atlas Shrugged, Greenspan, defending his mentor, published a letter to the editor that ends: 'Parasites who persistently avoid either purpose or reason perish as they should.'" So let there be no doubt where Alan Greenspan, Paul Ryan and other Republicans are coming from. They are out to screw the "parasites" whom they consider to be the lower classes and are out to reward the "supermen," who in today's world are the CEOs, hedge fund managers and the super wealthy. Their common ideological basis is Ayn Rand by way of Nietzsche and cousin to Hitler. By the way when Ayn Rand was dying of lung cancer she went on Social Security and Medicare, a concession of the ubermensch to the fact that we're all finally at the mercy of forces greater than the "will to power."

April 09, 2011

When I was a small boy I was bullied more than most, mainly because I was a foot shorter than everyone else. They demanded the cupcake my mother had packed in my lunchbox, or, they said, they’d beat me up. After a close call in the boy’s room, I paid up. Weeks later, they demanded half my sandwich as well. I gave in to that one, too. But I could see what was coming next. They’d demand everything else. Somewhere along the line I decided I’d have a take a stand. The fight wasn’t pleasant. But the bullies stopped their bullying.

I hope the President decides he has to take a stand, and the sooner the better. Last December he caved in to Republican demands that the Bush tax cut be extended to wealthier Americans for two more years, at a cost of more than $60 billion. That was only the beginning — the equivalent of my cupcake.

Last night he gave away more than half the sandwich — $39 billion less than was budgeted for 2010, $79 billion less than he originally requested. Non-defense discretionary spending — basically, everything from roads and bridges to schools and innumerable programs for the poor — has been slashed.

The right-wing bullies are emboldened. They will hold the nation hostage again and again.

In a few weeks the debt ceiling has to be raised. After that, next year’s budget has to be decided on. House Budget Chair Paul Ryan has already put forward proposals to turn Medicare into vouchers that funnel money to private insurance companies, turn Medicaid and Food Stamps into block grants that give states discretion to shift them to the non-poor, and give even more big tax cuts to the rich.

There will also be Republican votes to de-fund the new health care law.

“Americans of different beliefs came together,” he announced late last night. It was the “largest spending cut in our history.” He sounded triumphant. In fact, he’s encouraging the bullies onward.

All the while, he and the Democratic leadership in Congress refuse to refute the Republicans’ big lie — that spending cuts will lead to more jobs. In fact, spending cuts now will lead to fewer jobs. They’ll slow down an already-anemic recovery. That will cause immense and unnecessary suffering for millions of Americans.

The President continues to legitimize the Republican claim that too much government spending caused the economy to tank, and that by cutting back spending we’ll get the economy going again.

Even before the bullies began hammering him his deficit commission already recommended $3 of spending cuts for every dollar of tax increase. Then the President froze non-defense domestic spending and froze federal pay. And he continues to draw the false analogy between a family’s budget and the national budget.

He is losing the war of ideas because he won’t tell the American public the truth: That we need more government spending now — not less — in order to get out of the gravitational pull of the Great Recession.

That we got into the Great Recession because Wall Street went bonkers and government failed to do its job at regulating financial markets. And that much of the current deficit comes from the necessary response to that financial crisis.

That the only ways to deal with the long-term budget problem is to demand that the rich pay their fair share of taxes, and to slow down soaring health-care costs.

And that, at a deeper level, the increasingly lopsided distribution of income and wealth has robbed the vast working middle class of the purchasing power they need to keep the economy going at full capacity.

“We preserved the investments we need to win the future,” he said last night. That’s not true. The budget he just approved will cut Pell grants to poor kids, while states continue massive cutbacks in school spending — firing tens of thousands of teachers and raising fees at public universities. The budget he approved is cruel to the nation’s working class and poor.

It is impossible to fight bullies merely by saying they’re going too far.

Books

Doug Ramsey: Take Five: The Public and Private Lives of Paul DesmondThis is a great book! Paul Desmond and Dave Brubeck formed the heart of one of the best all time jazz groups. Paul was the quintessential intellectual, white jazz musician. A talented writer, he never published anything. However author, Doug Ramsey has collected Paul's letters here. How ironic that now his writing in the form of letters to his father and ex-wife, among others, is finally published showing another window on the mind of this talented person.
A sideman, for the most part, his entire life, the Dave Brubeck Quartet might never have happened at all due to the fact that Paul had managed to offend Dave to the point where he never wanted to see him again. It had to do with a gig that Paul actually was the leader of. Paul wanted to take the summer off to play another gig, and Dave wanted Paul to let him take over the gig at the Band Box in Palo Alto, CA. Paul wouldn't let him and Dave, married with two children, proceeded to starve.
Due to an elaborate publicity campaign, when he realized the error of his ways, Paul managed to worm himself back into Dave's good graces. The rest is history.
This book is remarkable for the insight it gives into a working jazz musician's mind, wonderful pictures and interviews with the significant figures in Paul's life. Author Ramsey, not a remarkable penman himself, has nevertheless done a magnificent job of assembling all these various materials. Unlike a lot of jazz authors, he doesn't overly idolize his subject with the result that you get the feeling that you have met a real person and not a idealized version. That's high praise indeed for any biographer. (*****)